Integrity Matters
December 4, 2002

Firms must tell the truth

Editor's note: This is the debut publication of "Integrity Matters," a question-and-answer column that will appear each Wednesday on The Californian Business page. Jim Bracher is founder of the Bracher Center for Integrity in Leadership in Monterey. Bracher welcomes readers' questions on business-related ethics and values. Please write in care of INTEGRITY to newsroom@salinas.gannett.com. The center's Web site is www.brachercenter.com.

Question: (E-002) What obligation for truthfulness does management have with employees? Obviously, Enron stepped over the line by outright lying to employees. But how much truth is enough? When business prospects are down, when consolidations or reorganizations are being considered, when units are being sold or spun off, when business strategies change - all with potentially adverse impact on employees' continued employment - how much information should be shared with those being impacted?

Response: Management has 100 percent responsibility to deal with all of its stakeholders truthfully. Leaders provide appropriate information - as they see it. Sometimes optimism may seem naïve in hard times. When circumstances fail to improve, then these same leaders can be accused of ignorance or malfeasance. They make mistakes.

However, leadership can never skirt the truth. Timing of the telling of the truth requires judgment, which can be imperfect.

Great leaders err on the side of disclosure. Look for patterns and act accordingly. If someone lies one time, that is an event, or, perhaps, even a misunderstanding. If they lie twice, there is a pattern. If they lie a third time, it has become a habit. Habits are hard to change.

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